This is a steady operation, with 60% of revenue coming from fee-based services, including franchise arrangements, property management, and memberships. But until recently, the company has gotten little respect from investors, in part due to the supposed taint of time shares.

That's changing, as Wyndham puts up increasingly better numbers. The company is expected to earn $465 million, or $3.22 a share, this year on revenue of $4.5 billion; that's up from $2.49 a share last year and headed to $3.67 a share in 2013, based on analysts' estimates. The stock is up 42% over the past 52 weeks, to near $49, and could grow another 20% over the next year. It yields 1.9%.

Once part of Cendant, the sprawling conglomerate that included Avis, Budget, and Coldwell Banker, Wyndham was split off into a separate company in 2006. Just in time, in other words, for the credit crisis and the evaporation of financing for time-share sales, and a sharp decline in overall leisure travel.

"We had a new business that people didn't really know all that well," CEO Stephen Holmes told Barron's. And what they didn't know scared them. The stock plummeted 90% from its spinoff price, to $2.92 at the market bottom.

While time shares get a bad rap, they produced 49% of Wyndham's revenue last year and 48% of earnings. The remainder comes from its franchised hotel business and an exchange platform that offers home rentals and time-share swaps.

No one at Wyndham claims time shares to be any type of real-estate investment. "You're prepaying your vacation experience for the future," the CEO says. A time share's condo-like accommodations are particularly compelling for a family with young children.

These days, the company is more efficient with its time-share pitch. It offers fewer tours but generates sales of $2,230 per tour, 40% above the 2007 level.

Management now offers those marketing skills to outside developers who build new time-share properties, cutting back on its own development efforts. This new asset-light model accounted for 7% of sales in the time-share segment last year. Management expects that figure to rise to 20% in the next three years.

"If they're growing at the same pace but using someone else's balance sheet, theoretically the multiple should expand," says JPMorgan analyst Joe Greff. He thinks the stock could be worth $60 in a year, based on a multiple of 12 times free cash flow.

The Bottom Line

Wyndham's shares could move up another 20% as profits grow and the hotelier and time-share operator continues its aggressive stock buyback program.

Wyndham's hotel operations, given the franchise model, don't require much in the way of capital.

Lower capital needs are driving free cash flow, which could reach $750 million this year, according to FactSet. Wyndham's management has been returning that cash to shareholders in the form of share buybacks and dividends. In the past two years, the company has reduced shares outstanding by 22%.

Wyndham is also committed to raising its dividend in line with earnings. Patrick Scholes, who covers the company for SunTrust Robinson Humphrey, predicts a 15%-to-20% payout boost when Wyndham reports its annual results in February.

If there's risk to be found at Wyndham, it centers on the company's exchange platform. Most of the rental homes on the exchange are located in Europe. As in 2009, though, investors would be wrong to assume the worst. Wyndham says a majority of its rental properties grew transaction volume in the third quarter. Austerity notwithstanding, Europeans continue to make vacation plans.

Cheap Lodging

Lesser known and tainted by time shares' reputation, Wyndham trades at a discount to peers despite solid revenue and profits.